Rainmaking

As Dessert Holdings grew, sales for the three businesses were also growing, and in 2018, the team saw production capacity could become a potential barrier to further growth. One option, of course, would be to add more capacity. However, the team knew this would likely be a multimillion-dollar investment.

Meanwhile, Desserts had been assembling a small, 3-person FP&A team in St. Paul, MN to serve the increasingly complex financial needs of the business. Facing a difficult decision, the team decided the most prudent move, before spending millions of dollars in capital, would be to make a hard assessment of the current product line and customers. The team used Catalyst to take a deep dive into SKU and customer profitability, in an effort to eliminate unprofitable volume. According to VP of Finance Steve Hentges, “The exercise was about making the most out of our sales capacity. If you have a fixed asset base, you literally can only produce so many cases. So, the question is, how profitable can you make each of those cases?”

Dessert Holdings used the SKU and customer rationalization to eliminate $18MM in unprofitable volume, constituting about 5% of their total sales. Catalyst’s analysis tools allowed the team to spot these zero-to-negative profit items, and by eliminating them, it would free up capacity to replace them with SKUs with margins that were accretive to the business.

“The biggest asset of the Catalyst software, from my point of view, is our ability to understand the results. It gives me an idea of customer and item profitability, which is extremely powerful, and helps us guide our resources to the right places.” says Hentges. “I can do rate-volume mix effects calculations on our results that would not otherwise be available.”

Building upon a strong foundation, the Dessert Holdings team also used Catalyst to democratize data throughout the organization. Using Catalyst’s planning and forecasting tools, they engaged the sales team in a bottom-up forecasting process, using real time projections from the sales team to inform decisions in procurement and manufacturing.

One potential complication for a sales team who is selling across three businesses is the hurdle of working through forecasting for three different operations. Using Catalyst forecasting tools eliminates this complication completely. According to CFO Chris Rogers,

“We’re working on three different ERP systems right now, but the sales organization would never even know it. They’re forecasting for their customer across three different businesses, but they don’t have to build a separate sales forecast for the teams in Canada, Houston and Atlanta. The data just comes into Catalyst, and from there, we can do whatever we want with it.”

Integrating Catalyst so deeply into the forecasting process has also had another highly impactful benefit for the organization: it has created a feedback loop that gives constant visibility to the growth of the business and allows them to make important changes along the way. According to Rogers, “Catalyst’s feedback loop helps us identify where our growth is, where we’re forecasting it to go, and tells us how good we are at forecasting it. We can see all that at a very granular level. With our sales organization, we’re able to establish sales goals down to which customer they’re selling to and measure their progress throughout. It’s very important for driving accountability.”

For the sales team, Catalyst has become an invaluable resource. From the day-to-day real time information, to the forecasting, to the quick access to reports and historical data, it empowers the team with information faster, making their jobs more efficient. VP of Sales, Mary Aronson, shared an example: “When the month closes, we get the presentation deck and we have to write our channel reviews for our chairman of the board and the board members. Normally, this would take a lot of time. But with Catalyst, you’re so close to the business and you’re watching things progress throughout the month, so there really shouldn’t be any surprises. You’re seeing everything happen in real time,” says Aronson.

Using Catalyst to fuel so many aspects of the organization’s growth, CFO Chris Rogers reflects on the wide-ranging role the software has played.

“It has evolved as our organization has evolved – from one company, to acquiring multiple companies, to evolving our portfolio of businesses to work with a single sales force. Catalyst gives us a single aggregate view of the whole business and a deeper understanding of it, while greatly improving our planning and forecasting process.”